Income tax (IRPF) on property sales

When you sell a property, the difference between what you received and what it originally cost you may produce a capital gain that is taxed in your income tax return (IRPF). Calculating it correctly and knowing the possible exemptions can make a significant difference to the result.

In general terms, the transfer value (the sale price less certain expenses) is compared with the acquisition value (what the property cost plus the expenses and improvements that can be taken into account). Properly including all costs can reduce the tax significantly, and let properties have their own rules.

When the property comes from an inheritance or a gift, the acquisition value is determined differently. We check how it is determined in your case. If the inheritance has not yet been settled, see our inheritance and gift tax service.

There are situations in which the gain may be wholly or partly exempt:

• Reinvestment in a new main home within two years before or after the sale.
• The sale of a main home by people over 65.
• Other specific cases that we review depending on your situation.

In addition to income tax, the sale usually generates municipal capital gains tax. If the seller is not resident in Spain, specific rules apply.

If you have not yet sold, analysing the transaction in advance lets you know the tax cost and, where relevant, plan a reinvestment. If you have already sold, we prepare the information you need for your tax return.

• The purchase deed or, if inherited or gifted, the deed and the tax return filed at the time.
• The sale deed.
• Invoices for purchase and sale costs (notary, registry, taxes, agency) and for improvements.
• Proof of the municipal capital gains tax paid.
• If the property was let, the depreciation claimed in those years.

• Leaving out expenses that increase the acquisition value.
• Applying an exemption without meeting all its requirements.
• Forgetting to declare the sale of an inherited property.
• Not taking into account the municipal capital gains tax already paid.

We calculate the capital gain or loss, check whether any exemption applies and give you the information in order for your tax return, or coordinate it with whoever prepares it.